If the stock market were a boxing arena, Boston Acoustics
For the quarter, revenues shot up 16% to $17.9 million. Out of these sales, the company was able to bring in $1.8 million of net income -- a stunning 79% increase compared with the same period a year ago. Boston Acoustics recorded $0.43 in earnings per share (EPS), compared with $0.25 from the third quarter of 2004.
Although the company turned it up to bring booming results in the latest quarter, for fiscal 2005 its numbers are still out of tune. Through nine months, its sales have increased 4% to $42.8 million. To its credit, from the measly revenue growth, its earnings have danced to the beat of a 79% increase. And through three quarters, its EPS has ramped up 87.5% to $0.60.
Much-improved operating margins are one significant reason for the stellar earnings growth. After nine months, operating margins climbed to 7.8% -- an 86% increase compared with the 4.2% a year ago. Boston Acoustics' higher-quality margins has allowed its structural free cash flow to accelerate, ultimately permitting it to keep a clean balance sheet with $7.4 million in cash and no long-term debt. While a Foolish investor would like to see these margins even higher, it is at least a big step in the right direction.
Considering these improvements, is the company worth your investing dollars? While its relationship with DaimlerChrysler
Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.